2021 Legislative Victories

April 26, 2021

The 2021 legislative session ended yesterday, April 25. This 105-day session created many challenges. However, BIAW’s government affairs and lobbying team worked tirelessly to ensure legislators heard our members’ voices and to protect our industry from heavy impacts. Here are just a few of the important legislative wins (along with a few big losses):

Land use wins

• Protected Vested Rights in GMA: SB 5042 would have overturned the vesting doctrine essential for planning in the Growth Management Act. BIAW and its members were successful in ensuring the legislature did not make it even more difficult to acquire land and apply for permits for currently allowed uses. Vested rights in land use are critical in making land investments for housing.
• Protected “No Net Loss” Standard: HB 1117 would have increased mitigation standards from “no net loss” to “net ecological gain” on certain projects and added a salmon recovery goal to GMA. No net loss on projects is important because the mitigation requirements link to the actual impacts of the projects – a net ecological gain standard is constitutionally questionable (at best) and requires mitigation exactions over and above the impacts of the projects. Adding this kind of standard to public projects will increase the cost of housing. Residential construction already pays its way with infrastructure expansions, but those are still considered public. A NEG standard would increase the costs of sewer, electricity, gas, roads, etc., all needed for homes.
• Protected Further GMA Imbalance: HB 1099 added climate change to the goals and planning requirements of GMA. It also required planning to reduce vehicle miles traveled and recommended downzoning for rural residential density. All of these things upset the balance of the variety of community needs in GMA, most especially housing of all kinds for all economic segments, further driving housing prices higher.
• Ensured GMA Decisions Continue to be Made by Local Elected Officials: HB 1241 provided for tribal consultation in comprehensive planning over and above the public input that is available to all interested parties and individuals. Tribes can and should be a part of comprehensive planning. However, this measure elevated their engagement by providing extra consultation without any added responsibilities or liabilities. Comprehensive plans need to be adopted in an open public manner by locally elected officials.
• Removed Barriers to Condo Development: SB 5024 passed the legislature and streamlines who can do envelope inspections on small condo developments. These projects are built like traditional stick-frame single-family homes and should be a viable path for homeownership. With the passage of SB 5024, these types of condo projects will have a better opportunity to be built affordably and safely.

Labor wins

• Eliminated costly assessment for foundational public health: Under the original version of SB 5149, legislators proposed a $3.25 per member, per month “assessment” to pay for foundational public health.  This assessment was to remain in perpetuity. Based upon current enrollment numbers for BIAW and MBA Health Trusts, the cost per year of the assessment if it had passed was nearly $2 million!

Covered Lives in 2021

BIAW: 15,663

MBAKS: 34,176

Total Covered Lives:  49,839

49,839 x $3.25 per month = $161,976.75 per month

$161,976.75 x 12 months = $1,943,721 per year

BIAW/MBAKS health plan participants are already charged a 2% premium tax every year – a tax that is not paid by large, self-insured companies or labor union trusts.  The BIAW advocacy team has repeatedly pointed out the inequity in this tax to legislators and did so again in arguing against the proposed assessment contained in SB 5149.  In response to pressure from BIAW and other small business groups, there were new proposals floated for a “graduated assessment”, and then a sweetened beverage tax, which also died.  Ultimately, the legislature paid for “foundational public health” with the state general fund windfall dollars and some federal COVID recovery funds.  Defeating SB 5149 saved BIAW/MBAKS members nearly $2 million PER YEAR!

• Protected against costly and redundant direct contractor liability:  In a seismic shift of the employer/employee relationship, SB 5278 would have made general contractors liable for all benefits, contributions, and payroll for employees of subcontractors on their projects.  The BIAW advocacy team, along with several BIAW members provided written and verbal testimony against this terribly misguided bill, pointing out several issues.
  • It is already against the law not to pay employees.  The state has established the Department of Labor & Industries Wage and Hour division to enforce the current law and to ensure employees receive wages for their work.  L&I has the legal and administrative tools to enforce the wage and hour laws.
  • SB 5278 shifts responsibility over to builders, increasing overhead and administrative costs and absolutely will increase the cost of housing.  Contractors will have to either hire or contract out for accounting services to ensure that all payroll records, benefit contributions, etc. have been made on behalf of someone else’s employees.
  • SB 5278 will cause subcontractor payment delays.  General contractors will not pay subcontractors until a complete audit of payroll and benefits has been completed or risk potentially massive wage/benefit obligations to someone else’s employees.
  • The underlying basis of this bill violates due process by creating liability for another’s wrongful act.

Fortunately, SB 5278 never made it out of the Senate Labor, Commerce & Tribal Affairs Committee.

• Removed objectionable legal fees from Health Emergency Labor Standards bill: SB 5115 establishes a presumption of eligibility for workers’ compensation (L&I) coverage for “frontline workers” during a public health emergency.  Typically, the burden of proof is on the worker to show that he/she was injured at work.

An early version of the bill also included language that would have, for the first time in Washington, required employers to pay legal fees if they appealed the allowance of an L&I claim and lost.

(b) When a determination involving the presumption established in this section is appealed to any court and the final decision allows the claim for benefits, the court shall order that all reasonable costs of an appeal, including attorneys’ fees and witness fees, be paid to the worker or the worker’s beneficiary by the opposing party.

Such a shift in the legal obligations of employers challenging L&I claims would have been disastrous for employers as it would have a “chilling effect” on any employer legitimately questioning the validity of a claim.

Fortunately, this language was removed from the final version of the bill after strong objections by BIAW and other members of the business community.  SB 5115 ultimately passed into law, but without the objectionable legal fee language. BIAW’s own retro program, ROII estimates this saved our program half a million dollars annually, ensuring that more money can go back to participants and local associations.

• Defeated costly qui tam allowing third-parties to intervene in labor cases: Probably the worst of all of the anti-business bills introduced in 2021, passage of the so-called Qui Tam bill would have been calamitous for every business in Washington.

HB 1076 would have essentially opened the door to a flood of lawsuits against employers for even the smallest of labor, wage and safety violations.  In cases where a state agency, like L&I, declined to prosecute an employer for alleged violations, the bill would have allowed private attorneys, or “relators” to file lawsuits against employers in the name of the state.  The costs for employers to defend even the smallest of errors or violations would have been crushing, resulting in numerous settlements for thousands of dollars in order to avoid legal costs, even in cases of innocence or minor errors.

HB 1076 was modeled largely after a similar law in California that has led to disastrous results for employers and has proven to be of little consequence to workers while making attorneys wealthy.  BIAW’s advocacy team and strong member involvement in opposing this bill were critical to ultimately defeating this terrible piece of legislation.

Environmental wins

• Removed permitting decisions from new comprehensive health districts: HB 1152 originally would have removed permitting for potable drinking water and septic permitting from local health departments and turned over that decision making to a larger regional comprehensive health district made up of multiple counties. We were successful in making sure local health districts weren’t abolished and permitting will stay at the local level.
• Pushed for additional clarity in the creation of the Environmental Justice Council: SB 5141 was ambiguous and gave a newly created Environmental Justice Council a massive amount of unchecked power over most agency decisions. Although this bill passed with some major concerns, BIAW was able to narrow the bill’s focus and give clearer direction to the agencies and the regulated community. While this bill requires an environmental justice assessment on significant agency actions, we were able to get permitting removed from this list and limit the scope of the assessment to help limit the fiscal impact to projects and permitting. We were also able to add two members of the business community and a building trades union representative to the council, which is now purely advisory.
• Gave options and cost considerations when replacing shoreline armoring: SB 5273 would have required all shoreline armoring replacements be replaced with soft armoring instead of cement bulkheads. BIAW was able to amend the bill so that soft armoring isn’t mandatory if the project isn’t technically feasible or if cost is a barrier. This still allows flexibility and options for landowners while prioritizing the environment.

Losses

Expensive carbon policies passed the Legislature: Washington became the second state in the country to pass a cap and trade program (SB 5126). If the state doesn’t link up their cap and trade program with California and Quebec’s for carbon offset credits, it is estimated this policy alone could add up to $2.41 cents a gallon with very little improvement to the environment. The legislature also passed a Low Carbon Fuel Standard(HB 1091) designed to promote fuel alternatives and electric vehicles, adding additional cost to gas and potentially limit carbon emissions. These policies will no doubt impact the state’s economy and add to the cost of doing business in our state.

Thank you to all our members who participated in this session. Your voices were heard and you all were a huge part of why these bills were not passed.

If you have any questions about the results of the 2021 legislative session, please contact BIAW Government Affairs Director Jan Himebaugh at janh@biaw.com.